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  5. ARM: peter what are your current thoughts on ARM trading on the nasdaq; momentum of late is good [Armada Mercantile Ltd]
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Q: peter what are your current thoughts on ARM trading on the nasdaq; momentum of late is good
Asked by steve on November 27, 2023
5i Research Answer:

ARM stock has added nearly $15 in November, showing a big rally along with the market. It is now not far from its IPO-frenzy high of $69. ARM is a new listed semi company, based in the UK. Being international and 'new' it is not one we follow or know closely. It trades at a high 61X earnings. Its first public quarter beat estimates nicely, driven by big gains in its licensing revenue, which was 18% higher than consensus. Data centre and auto segments grew 20%. Still, ARM guided for lower than expected revenue in the next quarter, mainly due to timing delays on large deals. It has $2B cash and 30% growth is expected in 2024. We think it is a good company and should do well. It was a takeover target a year ago (regulators blocked the deal) and we think it will do well over time. We would be OK owning some of this but as noted it is not one we are paying a lot of attention to.